Jenny Marra MSP :  Regulatory Reform (Scotland ) Bill Stage 1 Speech in the Scottish Parliament debate


12 November 2013

As the Federation of Small Businesses has pointed out, regulation is necessary to protect our environment and communities from harm.

Through the bill, we have the opportunity to enshrine in law the expectations, practices, relationships and penalties for the many bodies that carry out regulatory functions.

Sadly, however, the bill falls short of such expectations.

Labour member’s speeches today will cover different sections of the bill.

My colleague Margaret McDougall will focus on part 1 and Claudia Beamish will examine some of the environmental aspects in part 2.

That leaves me to introduce the main areas that we feel need to be addressed.

Central to our concerns, and reflected in a wide range of evidence to the Economy, Energy and Tourism Committee, is the loss of local accountability when regulations are made, changed or removed.

The bill will give the Government a great deal of power over future regulatory reform, but there is little in the way of scrutiny of how that power will be used.

Indeed, the committee report states that it heard from many witnesses who had difficulty understanding the implications of the proposed enabling power because of the lack of detail on the circumstances in which it would be used, or to whom it would apply.

The Scottish Council for Development and Industry and the Law Society of Scotland both expressed concern that there is no clarity around the duty, which makes it difficult to interpret what the bill will achieve in practice.

The Law Society urged Parliament to clarify the approach that the Scottish Government is taking.

My fear is that the approach that the Government is taking is to centralise the power to set, change and create new regulations that will fulfil the more modest policy intention of providing national standards in regulation.

In the process, we are losing transparency and accountability, because the bill will not allow Parliament to scrutinise those powers, although they are being centralised, or to scrutinise the changes to the regulatory frameworks that they will bring.

Given that a number of businesses and stakeholders are voicing similar concerns, we need to know what action the Scottish Government is taking to ensure that changes will be made democratically and transparently.

In particular, I urge the Government to reconsider whether the super-affirmative procedure is a more democratic way of exercising its powers.

With regard to the national standards themselves, I appreciate that there is a need to eradicate duplication and inconsistency.

However, must that come through the sacrifice of local decision making?

Unison and the Scottish Trades Union Congress have both questioned whether the legislation strikes the right balance.

Unison stated:

“Authorities must be able to set their own standards and respond to local situations.”

Although I am glad that the minister is working with COSLA, I urge the Government to consider whether the bill needs to be amended to reflect the memorandum of understanding that has been agreed.

As Andrew Fraser of North Ayrshire Council said:

“It is unusual for legislation to require a non–statutory memorandum of understanding to make it acceptable and workable.”—[Official Report, Economy, Energy and Tourism Committee, 5 June 2013; c 2946]

I agree.

We need legislation that is sustainable on its own.

If the Government is to introduce national standards, it has a responsibility to balance those standards with the duty on local authorities to respond to local needs.

In turning from a provision that is not in the bill to one that should not be in it, I will touch on the duty to promote sustainable economic growth.

Just 29 per cent of those who were consulted agreed that that duty should be in the bill; there are serious concerns about how it will work in practice, which have already been aired.

The STUC, in its submission to the committee, argued strongly that a mandatory duty on regulators to pursue economic growth could create a conflict of interests in relation to their function to regulate.

Paul Wheelhouse: I am grateful to Jenny Marra for taking an intervention, but I hope that she picked up the point that I made in my opening speech that we have a situation in which SEPA, for example, is being asked to look at sustainable economic growth in the context of health and wellbeing, but the overriding statutory duty on environmental protection and sustainable management of natural resources takes primacy in that arrangement of three different duties. Those are three pillars of sustainable development.

Jenny Marra: I thank the minister for that clarification.

From my reading of the bill, it seems to me that the duty on sustainable economic growth overrides many of the other regulatory considerations—we are looking for clarification on that—and that is certainly the concern of many people who gave evidence to the committee.

Only 29 per cent of those who were consulted agreed that the duty should be in the bill, because it overrides other regulatory functions.

The STUC notes that duties that were placed on the Financial Services Authority that prevented it from introducing new regulatory barriers or discouraging the launch of new financial products severely weakened its ability to regulate the banking sector effectively, which illustrates that conflict of interests.

Scottish Environment LINK has said that the duty could override environmental protection or wellbeing and the Law Society has raised significant concerns about the validity of a duty that is not properly defined in law, as we have rehearsed this afternoon.

Unison has stated that without a legal definition it will be hard for regulators to make clear-cut decisions, and they may be left vulnerable to challenge through the courts, even with the minister’s proposed code of practice.

Fergus Ewing: Does Jenny Marra not recognise that, on the regulator’s duty in respect of sustainable economic growth, section 4 quite clearly states:

“In exercising its regulatory functions, each regulator must contribute to achieving sustainable economic growth, except to the extent that it would be inconsistent with the exercise of those functions to do so”?

That surely makes it clear that what Jenny Marra has said—that the economic duty would override those functions—is factually incorrect.

The Deputy Presiding Officer: Ms Marra, I will give you a little more time.

Jenny Marra: I do not accept the minister’s assertion.

If there is a duty with regard to sustainable economic growth without a properly defined legal interpretation of that, the matter becomes a very grey area that is open to many arguments in court.

That is the view of the Law Society of Scotland and of many people who gave evidence to the committee.

It may not be the minister’s view, but only 29 per cent of consultation respondents agreed that the duty should be included.

I think that we will have an on-going debate about that this afternoon, and probably at stage 2 and stage 3, but we should really get to the nitty-gritty of what the impact of the duty will be.

The implications were put to the committee by Professor Andrea Ross of the University of

Dundee—a legal expert—who wrote to the committee:

“Regardless of how this government interprets sustainable economic growth, there is no guarantee that a future government or the courts will not interpret it to mean a stable economy with no mention of its impact on ecological and social sustainability.”

Given the level of opposition, I am not convinced that the duty should be in the bill.

I see no reason why the widely used and legally defined duty for sustainable development is insufficient.

Derek Mackay: For clarity, will Jenny Marra tell me whether the Labour Party supports sustainable economic growth?

Jenny Marra: The Labour Party does indeed support sustainable economic growth, but not at the cost of absolutely everything else, such as hard-fought-for health and safety regulations that are very important to workers and our local authorities.

I fear that the bill suffers from one narrow aim: to centralise power.

The detail is scant on how it will be used, but we know that that power will be exercised here in Edinburgh, rather than in our communities.

Regulations must work for the communities that they keep safe, the businesses that they affect and the environment that they protect.

We are uneasy with much of the bill and when we take out those concerns we are left with a reorganisation of SEPA, for which we do not need primary legislation.

That leaves us with not much to support at all.

Paul Wheelhouse: Will Jenny Marra take an intervention?

Jenny Marra: I have taken all the interventions so far, but I think that I am out of time.

The Deputy Presiding Officer: The member is close to closing.

Jenny Marra: We will vote against the principles of the bill tonight and we hope that the Government will reconsider many of the measures before stage 2.


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